US Government to Car Dealers: Um, Your Clunker Checks are in the Mail

Car dealers are growing increasingly impatient with the government's slow pace in reimbursing them for accepting trade-ins as part of its popular "Cash for Clunkers" program, even though Transportation Department officials say they are working to address the delays.

The National Automobile Dealers Association estimates that dealers have hundreds -- and in some cases thousands -- of applications pending that are "worth hundreds of thousands or millions of dollars."

In Maryland alone, dealers have put in $36 million in claims under the clunkers program but have been reimbursed for only about 2 percent of the total, said Peter Kitzmiller, president of the 325-member Maryland Automobile Dealers Association.

"It is ludicrous at this point," Kitzmiller said. "We've got deals that are just sitting there waiting to be reviewed. The customer is gone, the car is gone, and you don't have your money."

Wait a minute, did someone forget to read the fine print?

Mike Crowley, the sales manager at Cooley Volkswagen Mazda in North Greenbush, [NY] says the program has "really improved sales."

But the dealership is still waiting for NHTSA to send rebate checks for 35 cars it has accepted under the program. That's more than $100,000 tied up with the government. NHTSA is part of the Department of Transportation.

"All of ours are still under review," Crowley said. "It's been tough."

Deborah Dorman, president of the Eastern New York Coalition of Automotive Retailers Inc. in Albany, says the average dealer is waiting on between $100,000 and $1 million in rebates. She says only 2 percent to 4 percent of dealers have been paid. "This is a big problem for cash-strapped dealers," Dorman said.

To compound the problem, Dorman said, NHTSA added a new rule that dealers have to deliver new cars right away to customers, even without rebates in hand. "This doesn't work," Dorman said. "They just throw that up on their Web site without warning. We think what they are asking the dealers to do is impossible."